Mahmoud Abbas's first stop upon his return to Ramallah on Sunday was at the grave of his predecessor, Yasir Arafat. Ostensibly he was paying homage to the father of the Palestinian national movement. In reality he was finally claiming the leader's mantle.

This was the grey bureaucrat's ultimate moment of glory. He may have been one of the earliest members of the PLO but, unlike Arafat and other fabled terrorist chieftains such as Abu Jihad, he was never revered by the people.

Even after assuming the presidency following Arafat's death, Abbas never received the adulation of the masses, his rivals within the Palestinian leadership easily belittling him as a light-weight and collaborator.

Perhaps that is why he went all the way last week at the UN, defying the combined pressure of the American administration and the Quartet, using his moment on the General Assembly podium for maximum effect and delivering his application for Palestinian membership to the Security Council, the body with the real power at the UN - even though that effectively doomed the application from the start.

Too politically weak to deliver his people a real state, he at least basked for a few minutes in the warm glow of the standing ovation.

Back in Ramallah, the glow quickly evaporated. Abbas has few options now. His Palestinian Authority is close to bankruptcy; his security forces, trained and equipped by the United States, are not about to embark on an offensive against Israel; and he has no concrete diplomatic gains to show for the UN campaign.

The much-heralded unity deal between Fatah and Hamas has not yielded any form of rapprochement and the Gaza Strip is as isolated as ever from the West Bank.

Veteran Palestine-watchers in Israel believe that, after a short break, he will adopt a dual diplomatic strategy. On the one hand, for leverage purposes, he will continue to pursue the Security Council application. Palestinian delegations have already been dispatched to lobby the governments of the wavering nations - Gabon, Nigeria and Bosnia.

At the same time, he will consider the Quartet's proposal for the resumption of negotiations. True, Palestinian spokesmen have already objected to the plan, as it does not include a freeze on settlement building.

However, Abbas cannot afford to cut himself off from the Quartet, particularly as it is the European Union members which he hopes will bail out the PA and save it from financial disaster.

Israeli Prime Minister Benjamin Netanyahu also enjoyed a boost to his popularity this week. A Haaretz/Dialogue survey, made after his speech at the UN on Friday, put his approval rating at 41 per cent, nine points up from where it was two months ago, at the height of the social protests.

A larger number of Israelis, 43 per cent according to the survey, still disapprove of the Prime Minister's performance, but on the local political scene, Netanyahu is relatively stable. He has not given his coalition partners or the right-wing element within Likud any reason to cause trouble. He withheld international pressure, giving nothing away for over a year, and was finally rewarded by a surprisingly pro-Israel speech by Barack Obama at the UN. Even Foreign Minister Avigdor Lieberman, forever on the lookout for deviations from the hard line, cannot complain.

For now, Mr Netanyahu can claim to have weathered the storm, seemingly confounding those who warned of a "diplomatic tsunami". Magnanimous in his successful UN campaign, he swiftly accepted the Quartet's proposal, even though it does not include a Palestinian recognition of Israel as a Jewish state. Despite the warm reception for the Palestinians at the UN, he still hopes to portray them as the stubborn and intractable party.

But the Palestinians are not Mr Netanyahu's most immediate worry now. That role is currently reserved for the two regional powers that were, not long ago, allies of Israel. Most of Israel's diplomatic efforts over the next few months will be focused on trying to minimise the fallout from the crisis in its relationship with Turkey and preparing for more changes, as yet unforeseeable, on its southern border with Egypt.

With President Obama focused now on his re-election, and the Europeans dealing with the Eurozone crisis, Mr Netanyahu hopes for a less pressured period in which he can deliver concessions to the Palestinians.

The biggest unknown though remains on the ground, in the West Bank. Senior IDF commanders began summing up Operation "Summer Seeds" this week, satisfied that the co-ordination with the Palestinian security forces held throughout the tense days of the General Assembly, and that aside from a few relatively minor clashes, the large demonstrations remained within the Palestinian cities and did not travel to Israeli positions and settlements.

The five battalions that reinforced the IDF's regular units in the West Bank will return to routine duties. But many of them remain cautious. "I don't know how long the Palestinian security will continue co-operating with us when they realise they are not getting any closer to an independent state" said one senior officer. "It can't last forever." While a central Shin Bet operative opined that "the potential for a conflagration is still there, even if the Palestinians currently have no interest in it. Only a serious diplomatic initiative can change the situation. Meanwhile, any spark could set thinks alight."

Where would that spark come from? A terror attack by Hamas or another Palestinian movement opposed to Fatah could provide it, although the IDF, Shin Bet and their Palestinian counterparts have managed to prevent any serious attacks from originating in the West Bank over the last three years. The Shin Bet's main worry is from the Jewish side.

On Friday, stones thrown from a passing vehicle on the main road south of the Gush Etzyon settlement bloc, caused Asher Palmer to crash his car, killing him and his baby son, Yonatan. At the funeral in Hebron on Sunday, Rabbi Dov Lior, one of the spiritual leaders of the settler movement said that all the Palestinians living in the area were "murderous rioters," adding that "According to the Torah, there is a need for collective punishment, and the IDF must carry this out against the rioters. There are no innocent people in war." The Shin Bet fear that some of Rabbi Lior's listeners won't leave that job to the IDF.